Lspoon1
01 Dec 2014
Re: Possible reason ? DPPIn my opinion, you should not get your hopes up that the write down on Kleeneze is connected to a potential sale of the business.Sometimes a company will pay more for an acquisition than the value of the assets it is acquiring. It does this because it believes the value of all the intangible benefits such as reputation, staff, brand, contracts, clients and so on justifies the premium and that these intangible assets will generate substantial returns in the future. The surplus it pays is classed as Goodwill under Intangible Assets.When Findel bought Kleeneze it paid £19m more for the business than the value of its assets. Findel would be required to write off this goodwill (normally over a period of 20 years) which is referred to as ‘Amortisation’ in the profit and loss account. As long as management believe the value of the goodwill in the business is the same or higher than the value in the accounts they don’t have to do anything. If they believe it has been ‘permanently’ reduced they have to write off that amount. The most important word here is ‘permanent’. If, for example, the business had a bad year due to unusually harsh weather, it would not have to write-off goodwill because this would be temporary.The key issue here, and the one you need to address as part of your investment decision, is that management have effectively stated that this reduction in Kleeneze is permanent. In my opinion, the driver behind the share price decline is that the Board are saying they do not believe they can turn Kleeneze around in the way they believed they could a few months earlier. Hence the write down in goodwill.Investors were told that the Group was targeting a 7% - 9% operating profit on what they believed at the time was a Group Sales target of c£500m. The basic maths of this gives £35m - £45m of operating profit. The Board now appears to be saying it is selling Kitbag and the sales of Kleeneze look to be in terminal decline. These two businesses account for c£120m of sales. If the 7% - 9% is on the remaining £380m of sales then operating profit falls to £27m - £34m.The difference between these two profit ranges is around 22% which explains the fall in the share price since the announcement.
delta delta papa
01 Dec 2014
Possible reason ? Ever since reading the half year report last Wednesday I have been puzzled why the company decided that the half year results would be a good time to record this exceptional non cash impairment.In reading the definition of 'impairment', in accountancy terms it means a revaluation of fixed assets. Why would you do that ? Well under 'revaluation of fixed assets' I found this :-In finance, a revaluation of fixed assets is a technique that may be required to accurately describe the true value of the capital goods a business owns. This should be distinguished from planned depreciation, where the recorded decline in value of an asset is tied to its age.Fixed assets are held by an enterprise for the purpose of producing goods or rendering services, as opposed to being held for resale in the normal course of business. For example, machines, buildings, patents or licenses can be fixed assets of a business."The purpose of a revaluation is to bring into the books the fair market value of fixed assets. This may be helpful in order to decide whether to invest in another business. If a company wants to sell one of its assets, it is revalued in preparation for sales negotiations."The sale of Kleeneze would be a great move.DDP
delta delta papa
30 Nov 2014
Re: Lspoon1 No Fishxx, not full of poison, simply someone who has always been bearish on this share, but despite telling us "I have a principle that I never short sell nor do I make postings aimed at pushing a share down for personal gain", does exactly that. All future LS1 posts must be read with this deception in mind.DDP
shorty3
30 Nov 2014
Re: Lspoon1 Lspoon1 Your post (or was it an email?) makes rather a lot of assumptions about my investing, most of which are incorrect.I normally always place a short / CFD to hedge my larger investments and therefore have some experience in shorting stocks.Your post states "I shorted 50,000 Findel shares at 282p and closed at 202p giving a gain of £40,000 in approximately 6 months."OK if you made £40K shorting FDL then fair play to you, we are all here to make money whether it be long or short, however I don't believe you did and I will explain why:-You state you shorted 50,000 shares, as far as I am aware in the UK, as a individual investor you cannot just waltz up to an insurer or investment fund and borrow 50,000 shares you have to be an institutional investor to have that facility, (please correct me if I am wrong) as a PI you would have to take out a spread bet or CFD, betting on a falling share price and to make £40,000 from 282 to 202 (80 points) you would need to place a stake of £500 per point, a rather large stake by anyones standard.Please advise which institution / broker / trading platform you "borrowed" the 50,000 shares off? or even better post your trade.Shorty
fishxx
30 Nov 2014
Re: Lspoon1 maybe Ls' spoon is full of poison, one can only hope fffishxx
delta delta papa
29 Nov 2014
Re: Lspoon1 I have spent some days now considering a response to the recent release of the half year figures and the subsequent share price drop and of course Lspoon1's very detailed opinion.The figures themselves were as expected really, the big surprise was the non cash £19m exceptional impairment charge triggered by the poor performance of Kleeneze. This would appear to be the only reason why the share price was driven down so significantly, although it must be said, this was not an institutional sell off as suggested by LS1. Old Mutual have reported a reduction in holding of 200,695 shares. Somewhere in the region of 350,000 shares were traded on the 26th November representing less than one half a per cent of the total shares in issue. More shares changed hands on both Thursday and Friday than Wednesday and here it would be fair to assume that there were more buys than sells because the price recovered from under £1.90 to its closing price on Friday of £2.08/£2.09. Again LS1 as before has presented the case very eloquently but included much reading between lines. It is conceded early on in the post that the presentation is a personal take on the figures. You have to remember that LS1 has confessed to a short position in FDL so the opinion has to be read with this in mind.Unfortunately I am not conversant enough with a set of accounts to present a case for those long in this company except to say that even LS1 admits that the sale of Kitbag will enable the board of directors to achieve its margin target of 7-9% pre tax profit.I can find three brokers who are are currently offering views on Findel, N+1 Singer the house broker, Cantor Fitzgerald and W H Ireland. All three are still reiterating their buy stance and all have price targets of £3 or more.Let me remind you of some basics as far as LS1 is concerned. "I have a principle that I never short sell nor do I make postings aimed at pushing a share down for personal gain." Was what the honourable LS1 said in a post on the 12th February 2013."My first ever post on this board was on 4 February 2014 when the share price was 292 pence." Was what LS1 said on the 4th November 2014. The truth is, LS1's first post was on the 4th February 2013, when of course the opinion stated became completely irrelevant.So in conclusion we have a short seller in LS1 who who sets out a very compelling case but is very forgetful when it comes to previous posts. For what it's worth, my opinion is this. On losses of £400,000 at the half year in 2013, Findel were able to report full year pre tax profits for the 2013/14 trading year of £22m. For the half year to September 2014 this figure had improved to a £1.5m pre tax profit. Even without the sale of Kitbag we can expect similar profits for the 2013/14 trading year based upon last years performance. If Kitbag were to be sold we could look forward to profit in excess of £30m and reduced core bank debt. Much more in line with the board of directors projection of 7% margin target.I am no expert but I do feel that Findel have been over punished for accounting for their impairment charge recently which has not affected their cash at bank position. In basic terms there is still more cash flowing into this business than going out. As time goes on, cash burn is reducing and income is (if not increasing) still being maintained as a group.Good luck to all genuine investors.DDP
Lspoon1
28 Nov 2014
Re: Lspoon1 ShortyYou are indeed the clown of investors.I’ll pick out the two key words in your post: ‘agenda’ and ‘credibility’.AgendaI have no hidden agenda, I have been very open where I stand. From the outset I said I could not see long-term value. The share then more than doubled in price. It’s not a great leap to work out that if I did not see ‘long’ potential at 150p that I would see ‘short’ potential at 320p.I have not hidden the fact I was short on FDL, in fact I expressly stated it in an earlier post but even if I had not, an experienced investor would have worked it out.CredibilityI define credibility in investing as making money. I shorted 50,000 Findel shares at 282p and closed at 202p giving a gain of £40,000 in approximately 6 months.In terms of your credibility you invested in Findel pre-2009 and by your own admission were sat on a £120,000 loss at one stage. In September of last year you cashed out your initial investment and let your £45,000 roll. That £45,000 is now 20% lower at £36,000. To be sat on a paper loss of £120,000 I would guess you must have invested at least £150,000. £36,000 profit on £150,000 would give you a 24% return over 5 years. Over that time the FTSE 100, FTSE 250 and FTSE Small Cap are all up by more than 40% which means a blindfolded monkey sticking a pin in a list of stocks would have probably done better than you.Of equal hilarity is that on selling Findel you took your initial investment (assume £150,000) and trundled off to RRL where your own posts confirmed you already owned stock and had been averaging down at 2.2p.At that time RRL was at 2.1p. If you were good to your word (and you were a very strong Buy on the RRL Board at the time) it must have been a painful exit at 0.96p as per your post of 20 Feb 2014 . That would be a loss of £82,000 in less than 6 months plus the loss on what you owned already.You positively ooze credibility……..
shorty3
27 Nov 2014
Re: Lspoon1 fishxx, deltadon't bother with a response -You should just place Large Spoon on ignore - as I did - it is plain for all to see that he obviously has an agenda and any credibility he may have had a year or so ago was shot to pieces after his post 04/11/2014 - end of.PS "I am big enough to accept that I made a mistake in a previous email about the timing of my first post. It was a hasty response to a typical cheap Shorty email. I should have been more considered."Lspoon1 - a hasty response - your post of 04/11/2014 was in a hasty response to my post of 30/10/2014 - 5 days later - I would hardly call that a hasty response - it beggars belief how long a slow considered response would take you.GLAG holdersShorty
Lspoon1
27 Nov 2014
Re: Lspoon1 Hi FishEverybody is entitled to their opinion and some will be right and some will inevitably be wrong.I fully accept mine may be wrong which is why I always explain the thinking behind my view. If someone wants to explain how Kleeneze can pull itself around or why it is okay to see the Education business go backward I am open to being persuaded.What frustrates me is when a post talks about prices 50% above the current level with no substance behind it.Let's revisit in 6 months as you suggest
fishxx
27 Nov 2014
Re: Lspoon1 you also like going back through post . go back in yell posts the last time the price was 92p .you will see i forcast the demise of yell . because young people could get the phone numbers they wanted much quicker on their mobile phones... everybody shot me down ... yell now ????? i have been torn apart because i cant spell or my gramer is bad >>>>> but i wasnt in yell !!!!!!!. simple lodgic is SOMETIMES the best but in 6months we will im sure see who is right .... i might add shoty and delta delter papa have if you check back which you like to do, will see have over the last 7 years not been far of the mark .. all the best fish
fishxx
27 Nov 2014
Re: Lspoon1 no bounce by the way was quoted in point ( 1 )
fishxx
27 Nov 2014
Re: Lspoon1 OVER ANALYSING ?????? maybe !!!!!!!!!! most investers go with the flow { trend is your friend } always holds good if you check the %%%% but hey how you could be right ..... and very good posts i might add..... lets talk in say 6 months ok with you ???????????
fishxx
27 Nov 2014
Re: Lspoon1 massive volume i might add !!!!!!!!!!!!!!!!!!!!!!!!!!
fishxx
27 Nov 2014
Re: Lspoon1 all the EXPERTS eeerrrmmmrm seem to dissagree with you Lspoon 1 ???????????
fishxx
27 Nov 2014
Re: Lspoon1 eeerrrrrrrrrmmmmmm that non bounce ??????????????? 20% claw back ... would you agree lspoon 1 ????????????????
